GOP debt ceiling demands threaten June default

What happened

With the prospect of a catastrophic default looming, President Biden called a meeting to discuss the debt ceiling with House Speaker Kevin McCarthy and other House and Senate leaders next week. Treasury Secretary Janet Yellen warned that the U.S. will likely exhaust its “extraordinary measures” to prevent a breach of the government’s $31 trillion debt ceiling “by early June, and potentially as early as June 1.” House Republicans are threatening to force the U.S. into default if Biden doesn’t agree to a list of spending cuts and policy concessions. The administration insists on a “clean” increase untethered to the GOP’s demands.

House Republicans’ “Limit, Save, Grow Act,” passed last week, ties a $1.5 trillion debt-ceiling hike to steep discretionary spending cuts. Senate Democrats will ignore it, but Republicans hope to use the leverage of refusing to raise the ceiling to reverse key Biden green-energy priorities. The GOP bill would also cut IRS funds to beef up tax enforcement—though the Congressional Budget Office estimated the increased enforcement would bring in $100 billion in revenue. GOP demands to return to prepandemic spending levels would require massive cuts in safetynet spending, including veterans’ medical care. House Minority Leader Hakeem Jeffries announced that Democrats would try to push through a debt hike via an obscure procedure called a discharge petition. The move, however, would require Democratic unanimity, plus five House Republicans crossing the aisle. Instead, in a recent joint letter, three Democratic representatives broke ranks and pushed for negotiations with Republicans.

What the columnists said

This “staring contest” is dangerous, said Rachael Bade in Politico. Congressional Republicans say their passage of a budget bill last week puts the onus on Biden to act. But Biden, with raw memories of the debt negotiations that led to the first-ever downgrade of U.S. credit in 2011, considers the Republicans’ bill a toxic ransom note. He’s determined not to be blackmailed, and could even try invoking the 14th Amendment’s clause stating that the public debt “shall not be questioned” to keep paying U.S. debts.

McCarthy has blown up “Biden’s entire operating assumption,” said Kimberley A. Strassel in The Wall Street Journal. Democrats thought the speaker was too weak to unite the narrow, fractious GOP House majority behind any debt-ceiling bill. Well, he wasn’t, and now the pressure is on Biden. But if hard-liners revolt against the concessions McCarthy will need to make to reach a deal, “Democrats go back to calling the shots.”

Enough of this false equivalence, said Norm Ornstein in The Bulwark. Republicans know preventing a clean debt hike is both dangerous and unnecessary. They approved three during Donald Trump’s presidency, which helped add “a staggering $7.8 trillion” to the debt. They just want to inflict pain on the Democrats. Far-right Freedom Caucus Republicans would even “be fine with a default”—and that’s the faction leading McCarthy around. A default would crash markets, cost millions of jobs, sap retirement savings, and diminish America’s global standing. If it happens, blame only “the GOP’s recklessness.”